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Markups and Concentration in the Context of Digitization: Evidence from German Manufacturing Industries

Author

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  • John P. Weche

    (Hamburg University of Applied Sciences, Germany
    Monopolies Commission, Bonn, Germany
    Leuphana University of Lüneburg, Germany)

  • Joachim Wagner

    (Leuphana University of Lüneburg, Germany)

Abstract

Recent empirical studies suggest that there is a rising trend of market power across sectors in advanced economies. We contribute to this line of research by providing industry-speci_c evidence for German manufacturing industries, based on representative high-quality _rm level data from o_cial statistics that cover _rms from all size classes with more than 20 employees (2005{2013). We compare _rm-speci_c markups and industry concentration as market power indicators and discuss the role of digitization. Our results do not suggest an overall average increase in market power in German manufacturing. However, if we look at changes in individual industries, then we do _nd increasing markups and an increasing concentration in many industries. We also demonstrate the ambiguous relationship between the two indicators and _nd no clear evidence that digital transformation and market power go hand in hand.

Suggested Citation

  • John P. Weche & Joachim Wagner, 2020. "Markups and Concentration in the Context of Digitization: Evidence from German Manufacturing Industries," Working Paper Series in Economics 391, University of Lüneburg, Institute of Economics.
    • Handle: RePEc:lue:wpaper:391
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    2. Shen, Guobing & Shen, Binchao & Wu, Ruochen & Yuan, Zhengyu, 2023. "Internetization and the markups of export firms: Evidence from China," Economic Modelling, Elsevier, vol. 120(C).

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    More about this item

    Keywords

    Market power; business concentration; markups; digitalization; manufacturing; Germany;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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